Sylva News Sylva News
By Steve Ndubueze, Correspondent
Nigeria’s Naira may lose ground due to rising foreign-currency demands, despite raising $900 million from a domestic dollar bond sale.
Naira was quoted at N1,650 to a dollar on the official market on Thursday.
Data from London Stock Exchange Group, LSEG Plc, shows same rate at which the currency was changing hands in the black market.
This was compared with a closing rate of about N1,592, a week earlier.
“The dollar increase in itself does not translate to an appreciation, until the Central Bank of Nigeria, CBN, puts out those dollars to the market,” a trader has noted, stressing that “demand is overpowering supply”.
The trader however argued that, if CBN increases the size of its interventions on the currency market, it could support the Naira, but its interventions had been too slow.
Nigeria’s unstable currency can be seen as a sharp deviation from Ghana, as Cedi is seen trading relatively stable on the back of weak foreign-currency demand and continued with its Central Bank’s support.
LSEG data shows Cedi trading at 15.65 to a dollar, a week ago.
“The Cedi traded relatively stable, against the dollar in the past week with very little interbank activity”, according to data analysis.
Corporate demand has also decreased in the last few sessions,” according to Sedem Dornoo, a Senior Trader at Absa Bank, Ghana.
“We expect the pair to remain relatively stable in the coming week,” he added.
Another trader said the Central Bank’s interventions could anchor the pair in the short term.
Same to Zambia’s Kwacha, which is likely to hold steady, supported by companies selling dollars as they prepare to pay taxes.
On Thursday, September 12, the Kwacha was quoted at 26.25 per dollar from 26.30 a week ago.
“We have VAT (Value Added Tax) payments due mid-next week and this should support the local unit,” a financial analyst stated.
